The War for Talent Shows No Sign Of Ending

 
The War For Talent - 10 years old and still no sign of it ending

In the late 90’s McKinseys published the results of two surveys and gave birth to the phenomenon now known as the ‘War For Talent.’

Their research concluded that those companies who viewed talent management as a strategic priority experienced sustainable, improved company performance relative to their competitors.

Though the first survey was published over 10 years ago, the war for talent shows no signs of abating – or of its underlying causes being addressed, other than by a small number of forward thinking and particularly enlightened organisations.

In fact, the 3 fundamental forces fuelling the War for Talent are more powerful now than ever:

• an irreversible shift away from an industrial age to an information or ‘knowledge’ age
• the intensifying demand for high calibre people and the perceived ‘shortage’ of it
• the growing propensity for talented people to switch between companies to progress their careers

And there is nothing on the horizon to suggest this will change so this phenomenon will continue to be a defining part of the business landscape for the coming years.

Quantifiable bottom-line benefits

The companies that make talent a strategic priority and take a deliberate approach to developing and retaining talent stand to outperform their competitors and earn 22 percentage points higher return to share holders.

McKinseys confirm that high performers generate 40% higher productivity in operational roles, 49% increased profit in general management roles and 67% increased revenue in sales roles than average performers.

Put simply, good people who are well developed are great for business!
 

Key Insights

There are not enough talented people to go round

In the new knowledge economy, competition is global, capital is abundant, ideas are developed quickly and cheaply and can be easily copied, In this kind of environment, the most important corporate resource is talent: smart, sophisticated business people who are technologically literate, globally astute, and operationally agile.

Everyone agrees, over the next 15 years all that makes the difference are talented well developed people. Yet recent research shows that almost 90% of CEOs and HRDs think it is more difficult to attract talented people now than it was 10 years ago; and over 90% believe it is more difficult to retain them. Some 75% said they didn’t have enough talented people or were chronically short of talent.

At the same time, in developed nations, the supply of critical 30-44 year olds is shrinking – it will go down by around 15% over the next 15 years … and demand for it will go up by almost 25%. And around 30% of the best trained people entering the workforce prefer to work for start up or small businesses rather than global companies.

Its not what you’ve got – its what you do with it

Developing and retaining talented people is all about leadership mindset.

The most and least successful companies have very similar ‘talent development’ hardware. They have a performance management and review process, they hold development discussions, they offer ongoing development and training, they conduct talent reviews and develop complex talent matrices.

What sets successful companies apart is not superior HR processes – it’s the mindset and behaviours of the leaders throughout the organisation that makes the difference. They have a fundamental belief in the importance of developing their people – and take positive action to develop their teams.

Not everyone was born equal

All employees performance is not equal – so neither should their development be.

More and more companies understand the need to differentiate between their best and worst players in terms of reward … but this is equally true of development . Most companies employees segment into 3 core groups:

• High performers – the top 10-20 most talented employees
• Consistent performers – the middle 60% of employees who turn in a consistent performance and without whom the company would grind to a halt!
• Poor performers – the bottom 10-20% employees who need to shape up or ship out

Each of these groups need to be treated differently when it comes to development. Companies need to invest heavily in high performers to ensure they stay with the organisation and the business gets the full benefit of their potential. This is especially true in the critical managerial pool of 30-44 year olds. Consistent performers need to be stretched through job rotation and targeted development. And companies need to take decisive action with their the bottom 20% who need to be encouraged to improve their performance or move out of their role or ultimately the company.

Who’s working for who now?

Talented generation X and Y employees are more demanding about who they work for – and future opportunities to develop and grow plays a key role in their choice of employer.

Once, the employee had to justify the privilege of working for the company. Now the company has to justify why talented people should stay with it . And identifying companies who can help them improve their personal human capital and marketability has become a key differentiator for employees when chosing which organisation to join and stay with.

Winning the war

The organisations that are winning the war for talent are those who genuinely make talent management a strategic priority. This means all leaders, starting with the CEO – feel accountable for strengthening their talent pool. It starts with a mindset across their leaders that believes that successful and sustainable profit and growth only comes to those who have talented individuals delivering consistent high performance across their organisations.

These organisations and leaders they think and act differently – always looking for positive ways to stretch and nurture their best talent. They put in place effective processes to monitor and track their talented individuals. They act decisively if less talented individuals are blocking the roles needed to develop their best players.

They nurture talent at all levels of the organisation – not just those near the top. And they work hard to ensure both their A and B players are given the chance to develop and grow to their fullest potential.
 

Key Actions

Change your mindset

Put in place an effective, engaging education process for all leaders to get the message across that talent is not only ‘on’ the agenda – its very close top the top of your strategic priorities!

Changing the mindset of your leaders is the biggest single blocker to developing a talented organisation. Until this challenge is effectively addressed all other talent initiative will be doomed to failure.

Focus on developing strengths

It may sound counter-intuitive … but the most successful organisations have realised that the most effective development strategy is actively work to exploit the core strengths of individuals not to focus on developing their weaknesses. At the end of the day, its hard enough to develop a natural talent into a genuine strength – its almost impossible to develop skills you don’t have a talent for in the first place!

This requires HR and Training professionals to rethink their approaches to defining individuals learning and development requirements. And it means a new approach to training design and delivery is required to work to this belief.

Adopt a differentiated and deliberate approach to development

In many organisation great examples of development take place – but often this is only be serendipity! The best organisations have a very determined and planned approach to how they grow the core talent they need to stay ahead of their competitors.

They have very clearly defined and differentiated approaches to develop the different categories of talent that co-exist in their organisations. And they apply these relentlessly.

Provide leaders with core talent management skills

Getting leaders to think differently about talent is the first step. Getting them to act differently is a different challenge. Most leaders are only too familiar with the processes and paperwork that support the talent agenda. Where they are often less confident is in applying some of the core skills needed to be an effective people developer.

Leaders need to quickly refresh their skills in the following critical areas:

• Tackling poor performance
• Providing candid feedback
• Offering helpful coaching
• Recognising talent

Non traditional approaches to development

They key to success is making development a way of life, and every day occurance for every manager in the business. Every activity that an individual undertakes can be viewed as a development opportunity. This means leaders need to think more creatively about development and position opportunities in different ways to their people. It also requires a move away from institutional help to ‘self help’ when it comes to development with a re-emphasis on personal responsibility for development to match the organisations efforts.

Focus development on emerging skills

The emerging ‘knowledge economy’ needs technologically savvy and educationally bright people with the following key skills:

• Abstract reasoning
• Creative problem solving
• Effective communication
• Collaboration & team work
• Managing ‘networks’ of dispersed people & groups
• Engagement skills
• Relationship management skills
• Modern leadership skills

As organisations put together their annual training budgets, they need to ensure they have a good mix of programmes to support both the skills needed for todays challenges and also the skills required for the emerging business landscape of the 21st Century.
 

Contact

If you’d like to chat through any of the issues we’ve covered in this short paper please get in touch by calling us on 0207 208 7258 or by e-mailing info@nkdlearning.co.uk

If you’re in town, we brew a mean cup of coffee – so why not call in and catch up?